Insurer's Files Show Big Cost Differences For Same Illnesses

Yes, we've seen this before: a study showing large spending disparities to treat similar ailments and little if any link between expenditure and effectiveness.

What's different about a new analysis is the patients.

Many reports on cost and quality disparity (the best known is the Dartmouth Atlas of Health Care) are based on data from the government's Medicare program for seniors. But one published in the latest issue of Health Affairs focuses on care provided by nearly 250,000 doctors treating non-elderly patients insured by UnitedHealthcare from 2006 through part of 2009.

Some of the cost variations are startling. For treating a basic asthma episode, cases in the 10th percentile of distribution cost $98 each while those in the 90th percentile the cost was $1,535 per case. As usual, the study's authors, all of whom work for UnitedHealthcare or a sister company, attempted to adjust for case severity. That means you can't explain the difference by saying expensive patients were 15 times sicker than the cheap ones.

Migraine sufferers in the 10th percentile got treated for $94 while those in the 90th percentile cost the system $2,006. Expense for treating high blood pressure ran from $149 to $1,469 per episode.

The cost disparity for major procedures was smaller. But the dollars were larger. Bills for implanting a drug-coated coronary artery stent were $16,092 in the 10th percentile and $36,487 in the 90th — more than twice as much. Uncomplicated baby deliveries ranged from $6,149 to $12,090.

Like previous studies based on Medicare claims, the study also found wide variation in costs in different geographical areas. But bigger price tags didn't buy better outcomes. "We found essentially no correlation between average costs and the measured level of care quality across markets," the authors wrote.

The researchers studied doctors who had already been identified as providing higher-quality care, demonstrating large variability even within that group. However, some who received good scores for both quality and efficiency delivered care costing about 14 percent less compared with that of other doctors.

"Changing incentives through payment reforms could help to improve performance, but providers are at different stages of readiness for such reforms," the authors conclude.

Translation: The medical value equation is still far from being solved.